Asset allocation based system for individual investor portfolio selection

ABSTRACT

A system for allocation asset based portfolio investment and management provides model portfolios which are selected by correlation to investor&#39;s responses to a questionnaire concerning time frames and risk tolerance. Recommended model portfolios are presented to investors by asset allocation class percentages only, without identification of any specific securities of fund holdings of the portfolio and without enabling the participating investor to choose or delete specific assets for inclusion in the recommended portfolio. The system enables the investor only to alter the asset allocation. The model portfolios are professionally overseen and managed for compliance with projected returns and conformance to the assigned asset class. The system can be executed on paper or in the form of computer software run locally or on a network.

FIELD OF THE INVENTION

The present invention pertains generally to investments in securitiesand, more particularly, to systems for selection of investmentportfolios.

BACKGROUND OF THE INVENTION

Modern portfolio theory studies have shown that more than 93% ofinvestment performance is due to asset allocation. For individualinvestors who attempt to follow this principle, the task of allocatinginvestment or retirement find dollars among the thousands of marketedsecurities is formidable, and to be done successfully requires extensiveknowledge of securities markets and investing experience. For thesereasons, investing in securities was in the past done almost exclusivelyby trained professionals experienced in the markets and securitiesselection. The advent of discount brokerage services and the Internethave provided easy access to the purchase and sale of securities tovirtually everyone. Although Internet based on-line trading systems havemade the process of buying and selling securities very simple, they haveactually increased the probability for most of losing money,particularly by those with little or no experience in long terminvesting.

The assets of pensions and profit sharing plans of corporations andother types of entities have also traditionally been managed byprofessional investors. The creation of 401(k) type self-directedretirement accounts compelled employees to make their own investmentdecisions, albeit from a relatively small set of plan choices. Theinvestment allocation of retirement funds is typically done by providingemployees with a list of investment funds from which to choose, andrequiring the employee to designate an allocation percentage of theircontribution dollars to each available find. Some basic informationabout the funds, such as investment objective and performance history isalso provided. With only this skeletal information, plan participantsare expected to correctly allocate their retirement funds for optimalreturn. Furthermore, there are restrictions on the frequency with whichany reallocation of funds can be made.

To provide assistance to this task, retirement planning guides haveproliferated, many with more practical approaches which focus onparticipants' projected financial needs, rather than trying to teachinvestment strategies. Because money management and investing hassignificant behavioral and emotional components, many planners make anassessment of how the participant handles or responds to these aspectsof investing. This information or assessment is then used to recommendcertain investments, typically mutual finds, to the participant. Theparticipant is, however, left to make the final investment decisions ontheir own. So even though they have been provided with some assistancein the process, this prevailing methodology of retirement planning doesnot remove the participant—who is most likely a novice at investing—frommaking the most critical and important decisions which will directlyimpact their total return.

Although many different computer software-based approaches have beentaken to investment and retirement account management, such systems tendto focus on data acquisition and information processing of investorprofiles which are then matched to an appropriate portfolio by aprofessional investment manager. Financial planning software, whethercreating an investor profile of including time periods of contributionsand withdrawals and risk tolerance, or selecting investments which matcha developed profile, all leads to the point at which specific investmentdecisions must be made on an individual basis for each plan participant.

SUMMARY OF THE INVENTION

The present invention provides a system for selection of a predeterminedinvestment portfolio which is properly allocated in accordance withapplicable time periods and risk tolerance of individual investors. Theinvestor is not required and not enabled by the system to pick specificfunds or securities in order to achieve an appropriate allocation. Thesystem provides a plurality of model portfolios with differingallocations among stocks, bonds, money market, cash or cash equivalent.The responses to the questionnaire on time period of contributions toinvestment funds, time period of withdrawal, and risk tolerance arecorrelated to one of the predetermined model portfolios. A graphicalrepresentation of the suggested asset allocation is presented to theinvestor/participant, who is then required to accept or reject theproposed allocation, without knowing the specific securities proposedfor purchase in accordance with the allocation. Importantly, theindividual investor or plan participant is never required to pickspecific investment vehicles.

In accordance with one aspect of the invention, there is provided asystem for automated assembly of a professionally managed portfoliobased upon individual investor criteria. The system ascertains theinvestment goals of an individual investor by a series of questionsconcerning time frames, risk tolerance, appreciation targets andpercentage of total assets to be invested. The system then automaticallyselects an asset allocation model based upon the responses to thequestions. The asset allocation model is presented to the investor byasset class percentage allocations. The investor can then select theproposed asset allocation model. Selection of the model then reveals theidentity of the funds among which the allocation is made. Each fund inthe model is linked to further information such as the fund history,investment strategy, management team, list of securities held, returnhistory, ratings, etc. By allocating funds according to asset classcategories, and then to a corresponding professionally managedportfolios of funds, the investor is protected from the potentiallynegative results of individual fund picking and market timing. Anyre-allocation of the investment portfolio requires a re-taking of theinvestment objective questionnaire which leads to selection by thesystem of a different model portfolio based upon the responses to thequestionnaire.

In accordance with another aspect of the invention, there is provided asystem for proper allocation of investment capital according to aninvestor's financial behavioral characteristics as determined byresponses to a set of questions, wherein a model portfolio is selectedwhich correlates to the investor's responses to the questions andrecommended to the investor for purchase by presentation of percentageallocation per asset class and without disclosing individual securitiesor funds.

And in accordance with another aspect of the invention, there isprovided a method of investing an individual investor's capital in anindividual investment account portfolio without allowing the investor toselect individual securities in the portfolio, the method including thesteps of: querying the investor on time remaining for contribution ofcapital to an investment account and time during which withdrawals willbe made from the investment account; selecting an asset allocation modelportfolio based upon the investor's responses to the queries; presentingthe selected model portfolio to the investor as a recommended modelportfolio by showing percentage allocations by asset class and withoutdisclosing individual funds or securities in the recommended modelportfolio; requiring the investor to accept or reject the recommendedmodel portfolio, whereby acceptance of the recommended model portfolioallows the investor to view a list of individual funds or securities inthe portfolio, and rejecting the recommended model portfolio promptsselection and presentation of a different asset allocation modelportfolio.

These and other important principals and concepts of the invention areherein described an claimed in detail, with reference to theaccompanying Figures.

DESCRIPTION OF THE FIGURES

FIG. 1 is a block diagram of an organizational and operational structureof the investment system of the present invention;

FIG. 2 is a graphical and textual listing of an asset allocation modelportfolio constructed in accordance with the present invention;

FIG. 3 is a graphical representation of an asset allocation modelconstructed in accordance with the present invention;

FIG. 4 is listing of assets in a model portfolio, and

FIG. 5 is a graphical representation of another asset allocation modelportfolio constructed in accordance with the present invention.

DETAILED DESCRIPTION OF PREFERRED AND ALTERNATE EMBODIMENTS

FIG. 1 represents an organizational structure for operation of theinvestment system of the invention, described in the context of anemployer sponsored investment plan such as a 401(k) plan, although theprincipals and concepts of the invention are equally well applicable toselection of investment portfolios outside of such qualified plans.

A plan sponsor 1 presents to eligible employees 2 an investment plan inwhich employees can contribute finds, such as a qualified plan which istax sheltered, such as 401(k) type accounts. The system of theinvention, however, is equally applicable to other types of managedinvestment funds and plans wherein the funds of individual investors areto be allocated among different types of securities and cash. The planor qualified plan 3 consists of a plurality of asset allocation models30, also referred to herein as model portfolios, which are most broadlydefined by the overall investment objective, such as High Growth,Growth, Moderate Growth, Moderate, Moderate Conservative, Conservative,Income and Stable Value. These broad classifications of investmentportfolios are generally used nomenclature in the industry and theinvention is not limited to thereto but is equally applicable to othertypes and categories of investments. Each asset allocation model is madeup of percentage allocations to the various classes of investmentsselected to produce the targeted returns with the corresponding degreeof risk, as shown in FIG. 2. To select the specific securities or fundswhich make up the model portfolios by satisfying each of the specifiedasset classes, professional investment management 4 performs the tasksof researching available securities and securities funds, analyzing fundstrategies, management and performance history, and continuousmonitoring of securities, funds and fund management once selected forinclusion in one of the model portfolios, all in accordance with theprimary factors 5, including proper asset allocation correlated to theinvestor questionnaire, style drift, rebalancing if necessary, overlap,manager tenure, IPS, performance and beta. If in the opinion of theprofessional management 4, one or more of the securities or funds whichare a component of a model portfolio is either underperforming or hasdrifted from the desired investment strategy or objective, themanagement 4 has the discretion to sell that security or fund andreplace it with another security or fund holding which satisfies thecriteria and asset class of the portfolio. This proactive managedapproach to an asset allocated investment fund is markedly differentthan the typical investment plan in which a layman investor simplyselects one or more funds and is then locked into those funds for aperiod of time without any ongoing monitoring, and with restrictions onthe ability to make any changes to the portfolio, regardless of marketperformance. By contrast, the investment system of the inventionessentially provides ongoing personal professional money managementservices to individual plan participants, by assuring proper assetallocation for total return, and then continuously monitoringperformance of each of the assets of the portfolio.

Use of the system of the invention by an investor or plan participantbegins with a set of inquiries of an individual investor, focusedprimarily on real life and behavioral factors which impact how theindividual would like his/her money invested. In one embodiment, aquestionnaire is presented to the investor or plan participant withquestions on two main topics, time and risk tolerance. The time relatedquestions are to determine the number of years remaining forcontribution of funds to be invested, and to determine the number ofretirement years for which withdrawals are to be available. These timeparameters are important factors in the asset allocation modelselection, primarily with respect to the targeted annual rate of returnof the various assets in a portfolio. A second category of questions isdesigned to ascertain an investor's expectations for investmentperformance, risk tolerance, and emotional response to fluctuations inportfolio values. The percentage of total assets to be invested in theplan is also determined.

Non-limiting examples of questions in these categories are:

1. Given your financial goals, when will you begin withdrawing from this401(K)? “I expect to begin making withdrawals in”:

-   -   Less than 3 years    -   7 to 10 years    -   11 to 15 years    -   More than 15 years

2. Once you begin making withdrawals from this 401(K) how long will themoney need typically your retirement age subtracted from your lifeexpectancy. e.g. 85-65=20 yrs. (life retirement age)

-   -   Less than 5 years    -   For 5 to 10 years    -   For 11 to 15 years    -   For 16 to 20 years    -   More than 20 years

3. Which statement best describes your priorities regarding your StreetSmart 401(K)?

-   -   Protecting the money I have is more important to me than making        it grow    -   I prefer an investment strategy designed to grow steadily and        avoid sharp ups and downs even if it lowers returns    -   Making the most money is most important to me, even if it        requires some risks to do so

4. At the beginning of the year, you have $10,000 in your 401(K). Thegraph to the right shows the performance of four different hypotheticalportfolios. Each bar gives the range of potential values at the end ofone year. Example: Portfolio B could either go up to $11,000 or drop to$9,500 after one year. Which portfolio are you most comfortable with?

-   -   Portfolio A    -   Portfolio B    -   Portfolio C    -   Portfolio D

5. Which of the following statements best describes your attitude aboutinvesting for your Street Smart 401(K)?

-   -   Minimizing the chance for loss in my account is most important,        so I am willing to accept the lower-long-term returns offered by        lower risk investments    -   Experiencing some short-term loss in value in an effort to        achieve higher long-term returns is okay. However, I prefer that        the majority of my investment be lower risk    -   Seeking higher, long-term returns is important to me, so I am        willing to accept substantial short-term losses    -   Maximizing long-term investment returns is most important, and        I'm willing to accept large—and sometimes dramatic—short-term        losses in value to achieve this goal

6. If you had money invested in a diversified portfolio and the stockmarket took a downturn, when would you sell your riskier investments andput the money in safer investments?

-   -   At the first sign of loss    -   After a 10% loss    -   After a 20% loss    -   I wouldn't sell any of my investments. I would continue to        follow a consistent, long-term investment strategy

7. Which of the following types of investments do you feel morecomfortable with? An investment that might return:

-   -   5% a year on average over the long term, but has a 10% chance of        experiencing a decline in value in a given year    -   8% a year on average over the long term, but has a 20% chance of        experiencing a decline in value in a given year    -   11% a year on average over the long term, but has a 30% chance        of experiencing a decline in value in a given year    -   13% a year on average over the long term, but has a 35% chance        of experiencing a decline in value in a given year

8. Looking at other investments I own, such as pension, inheritance,stocks, CD's, mutual funds or personal investments, my 401(K) assetsrepresent the following percentage:

-   -   Over 75%    -   50%-75%    -   25%-50%    -   less than 25%

An investor's answers to the questionnaire provide a score or ratingwhich is correlated to the most appropriate asset allocation model whichwill provide the necessary rate of return and diversification forcapital preservation and control of volatility. In the system, theresponse to each question preferably has some bearing on the percentageallocations in each of the asset classes of the model portfolios.Depending upon how the questions and corresponding multiple choiceanswers are drafted, the chosen responses can directly impact assetclass percentage allocation, or be added to a total score which fallswithin a bracket correlated to a model portfolio, such as one of themodel portfolios shown in FIG. 2, as further described.

The asset allocation model portfolios of FIG. 2 are professionallyselected groups of securities or securities funds which fall within theasset classes necessary for diversification and growth. For example, theasset classes in the portfolios may include, in stocks, the various fundtypes of: large growth, large blend, large value, mid cap growth, midcap value, small growth, small value, small blend, international growthand international value; real estate (e.g. REITS); and in bonds, thevarious fund types of, for example: high quality, high yield, shortterm, U.S. government, and international; and in cash or cashequivalents: money market and stable value funds. Other categories offunds, including hybrids of those listed, and funds with similarholdings but which are categorized differently or under different names,can of course be included among the asset classes from which the modelportfolios are constructed. Not all asset classes are necessarilyincluded in each model portfolio.

The securities of the portfolios are selected and managed by investmentprofessionals, so that the investor or plan participant never selects,and cannot select, a security for inclusion in his/her model portfolio.The securities or funds are selected for inclusion in the modelportfolios by a professional money manager, based upon analysts'percentage recommendations per asset class, and by identifying the topmanagers within each class, and other factors as known in the industry,including for example and without limitation: alpha, R², standarddeviation, returns, security selection and removal, and ERISAcompliance. The funds within each portfolio are constantly monitored forstyle drift, duplication of holdings, manager turnover and performancecompared with their peer group asset class. This proactive monitoringand ability to replace a manger or fund quickly when needed gives ahighly competitive advantage over portfolios which are managed by thenovice self-directed investor or plan participant.

Upon completion of the questionnaire, the investor or plan participantis directly presented with a proposed model portfolio selected inaccordance with parameters set by the questionnaire responses.Importantly, the presentation of the proposed model portfolio 30 to theinvestor/plan participant is in the form of the selected optimal assetallocation, which as shown can be both graphical, as by pie chart 32 orany other graphical representation of percentage components of a whole,and asset class names in fields 34. In field 36 there is provided atextual description of the process by which the model portfolio wasselected, with the admonition that the investor or plan participantshould select the recommended model portfolio due to the fact that itcorresponds with his/her responses to the questionnaire on investmentobjectives. At this point the investor/plan participant is given theoption of accepting the proposed model portfolio as represented by field38, or viewing alternative model portfolios with different assetallocations representing either more risk or less risk, as representedin fields 40 and 42. Only after selecting the recommended modelportfolio are the actual fund holdings disclosed to the investor/planparticipant, in the form of an asset holding listing, as shown forexample in FIG. 4. In this example each of the portfolio holdings arevarious types of mutual funds, the names of which can be associated withor hyperlinked to additional detailed information about the funds, aspublished by the fund proprietors or compiled by fund tracking andrating services such as Morningstar or Lipper Analytical.

In the event the investor/plan participant does not accept therecommended portfolio and instead desires a greater or lesser degree ofrisk as would result from a different allocation, the investor is giventhe opportunity to change the allocations by operation of fields 40 or42. For example, selection of field 42, More Risk, would lead topresentation of a graphical representation of a different modelportfolio, as shown for example in FIG. 5, with a greater percentage oftotal assets invested in stock funds, representing a higher degree ofrisk than the portfolio of FIG. 3. This alternate model portfolio ispresented to the investor in the same general format as in FIG. 3, butwith the warning, for example in field 36, that the portfolio does notmatch the answers given to the questionnaire, and consequently mayresult in account activity and volatility which is outside theinvestor's desired parameters. Nonetheless, the investor may choose thealternate model portfolio, by selecting it in field 38, only after whichthe identity of the specific securities holdings of the portfolio arerevealed, as for example in the manner or format shown in FIG. 4.

The principles and concepts of the investment system of the inventioncan be executed in different forms, such as a paper based system inwhich the investor questionnaire is presented as a document which isthen processed by the plan manager to select the appropriate modelportfolio for presentation to the investor, who then accepts or rejects,and once a final selection is made the portfolio holdings are alsodisclosed on paper to the investor, similar to any paper accountstatement. Any changes which are made to the model portfolio by theprofessional managers can also be reported to the investors by a writtennotification.

The system can also be fully implemented and operated as a computerprogram which receives and processes all of the data from the investorsor plan participants and generates information and screen displays tocommunicate model portfolio selection and portfolio holdings to theinvestor on a single computer, or over any type of network, including anintranet, extranet, or global computer network such as the world wideweb. In a computerized digital format, the software generates screendisplays which prompts the user through the system, such as explanationof the asset allocation investment approach, presentation of thequestionnaire and storage of the responses to the questionnaire,presentation of the recommended portfolio without disclosing specificportfolio holdings, and then presenting specific portfolio holdings onlyonce the portfolio has been accepted by the user. In a networkedenvironment the system can be presented as multiple pages at a websitedomain, access to which can be controlled by an administrator whoprovides user names and passwords to investors of plan participants. Theasset allocation approach of the system is fully explained on one ormore pages of the site, and the process of model portfolio selection.The investor questionnaire is presented as text with active selectbuttons next to each of the multiple choice answers to each question. Tosegue from the completed questionnaire to presentation of a recommendedmodel portfolio, a button, labeled for example BUILD MY PORTFOLIO can beplaced at the end of the questionnaire. This prompts the selection ofthe appropriate model portfolio for display, in the format for exampleshown in FIG. 3. Of course other graphical and text formats fordisplaying this information in digital form are within the scope of theinvention. The portfolio options of ACCEPT, MORE RISK and LESS RISK asshown in FIG. 3 can be implemented as separate active buttons on a webpage which operate accordingly to either present alternative portfolios,or implement the accepted portfolio, followed by identification of thespecific securities or fund holdings of the accepted portfolio as shownin FIG. 4. Each of the specific securities or fund holdings of theaccepted portfolio can be hyperlinked to additional information aboutthese assets, such as to the separate website of a fund or findmonitoring service or to other sources of information about the assets.

1. An system for managed investment in securities by allocation ofassets among a group of asset classes in an investment portfolioaccording to an investor's responses to a questionnaire and withoutrequiring or enabling the investor to choose individual securities orfunds in which to invest, the system comprising: an investorquestionnaire with a plurality of questions pertaining to a) a number ofyears which the investor will contribute funds to be invested in aportfolio, b) a number of years which the investor will want to withdrawfunds from the portfolio, and c) the investor's tolerance forfluctuation in the value of the portfolio; a plurality of modelportfolios, each model portfolio having different allocations of assetsamong a group of asset classes, the model portfolios being representedby asset class allocation percentages only without identifying anyindividual securities or fund holdings in the portfolio; a correlationbetween an investor's collective responses to the questionnaire and themodel portfolios from which a model portfolio is selected andrecommended to the investor based upon the investor's responses to thequestionnaire.
 2. The system of claim 1 wherein the investorquestionnaire must be completed by the investor as a prerequisite torecommendation of a model portfolio to the investor.
 3. The system ofclaim 1 wherein a recommended model portfolio is selected by theinvestor without knowledge of the identity of any securities held in theportfolio.
 4. The system of claim 1 wherein the investor questionnaireincludes at least eight questions with at least two questions pertainingto time frames for investments and at least two questions pertaining torisk tolerance.
 5. The system of claim 1 wherein the model portfoliosinclude the asset classes of stocks, bonds and cash and at least onesubclass within each asset class.
 6. The system of claim 1 wherein therecommended model portfolio is presented to the investor in a graphicalform which represents the asset class allocation percentages, and withnumeric values of each of the asset class allocation percentages.
 7. Thesystem of claim 1 wherein the recommended model portfolio is presentedto the investor with an explanation of the importance of assetallocation, and a recommendation to accept the recommended modelportfolio for the reason that it is recommended based upon theinvestor's responses to the questionnaire.
 8. The system of claim 1wherein the recommended model portfolio is presented to the investorwith the options of accepting the recommended model portfolio oraccepting more or less risk than the recommended model portfolio.
 9. Thesystem of claim 8 wherein a different model portfolio is presented tothe investor in response to the investor accepting more or less riskthan the recommended model portfolio.
 10. The system of claim 1 whereina listing of securities holdings in the recommended model portfolio ispresented to the investor only after acceptance by the investor of therecommended model portfolio.
 11. The system of claim 10 wherein thelisting of securities held in the recommended model portfolio includes anumeric value of asset class percentage allocation for each securitylisted.
 12. The system of claim 11 wherein the listing of securitiesheld in the recommended model portfolio is correlated to additionalinformation about each security listed.
 13. The system of claim 10wherein one or more of the securities held in the recommended modelportfolio is changed after selection of the recommended model portfolioby the investor without further involvement or knowledge of theinvestor.
 14. The system of claim 1 in the form of software whichgenerates and displays the investor questionnaire and model portfolios.15. The system of claim 14 on a network.
 16. The system of claim 1wherein securities held in the model portfolios are selected by aprofessional money manager.
 17. A system for proper allocation ofinvestment capital according to an investor's financial behavioralcharacteristics as determined by responses to a set of questions,wherein a model portfolio is selected which correlates to the investor'sresponses to the questions and recommended to the investor for purchaseby presentation of percentage allocation per asset class and withoutdisclosing individual securities or funds to the investor.
 18. Thesystem of claim 17 wherein the set of questions include questionspertaining to an amount of time available for contribution of investmentcapital for investment in the model portfolio, an amount of time overwhich investment capital will be withdrawn from the model portfolio, andthe investor's tolerance for fluctuation in the value of the modelportfolio.
 19. The system of claim 17 comprising a plurality of modelportfolios constructed by asset allocation, each model portfolio havinga different asset allocation and corresponding different degree of risk.20. The system of claim 17 wherein the model portfolio selected for theinvestor is presented to the investor by a graphical and textual displayshowing percentage allocation per asset class.
 21. The system of claim17 further comprising an option for the investor to accept therecommended model portfolio or to select a different model portfolio bychanging a degree of risk the investor is willing to accept inconnection with the investment.
 22. The system of claim 17 whereinindividual securities of find holding of a model portfolio are presentedto the investor only after the investor selects the model portfolio onthe basis of asset allocation only.
 23. The system of claim 17 wherein alisting of individual securities in a model portfolio is presented witha corresponding percentage allocation of investment capital to eachindividual security.
 24. The system of claim 17 wherein individualsecurities of the model portfolios cannot be bought or sold by theinvestor.
 25. The system of claim in the form of computer software whichgenerates, displays and processes the questions and responses to thequestions, and selection and presentation of recommended modelportfolios.
 26. The system of claim 25 wherein the software is operatedover a network.
 27. A method of investing an individual investor'scapital in an individual investment account portfolio without allowingthe investor to select individual securities in the portfolio, themethod comprising the steps of: querying the investor on time remainingfor contribution of capital to an investment account and time duringwhich withdrawals will be made from the investment account; selecting anasset allocation model portfolio based upon the investor's responses tothe queries; presenting the selected model portfolio to the investor asa recommended model portfolio by showing percentage allocations by assetclass and without disclosing individual funds or securities in therecommended model portfolio; requiring the investor to accept or rejectthe recommended model portfolio, whereby acceptance of the recommendedmodel portfolio allows the investor to view a list of individual fundsor securities in the portfolio, and rejecting the recommended modelportfolio prompts selection and presentation of a different assetallocation model portfolio.
 28. The method of claim 27 performed bycomputer software which generates queries for the investor, processesresponses to the queries and selects a model portfolio based upon theresponses, and generates a display for presentation of the recommendedmodel portfolio to the investor, the display showing a percentageallocation per asset class.
 29. The method of claim 27 wherein therecommended model portfolio is rejected by changing a degree of risk theinvestor is willing to accept in connection with the investment account.30. The method of claim 27 wherein a model portfolio different from therecommended model portfolio is accessible by the investor by respondingto the queries differently than the responses which prompted selectionof the recommended model portfolio.
 31. The method of claim 27 furthercomprising the step of presenting a list of individual securities offunds of a model portfolio to the investor only after the investor hasaccepted the recommended model portfolio for investment of capital. 32.The method of claim 27 further comprising the step of constructing aplurality of model portfolios based upon asset allocation, and selectingindividual funds which fall within different asset classes, theindividual finds being selected according to criteria of a professionalmoney manager only and without any input from the investor.
 33. Themethod of claim 27 further comprising the step performed by aprofessional money manager of changing one or more of the individualassets of the recommended portfolio without prior notification orapproval by the investor.